Nepal Oil Corporation (NOC) does not plan to slash gasoline prices anytime soon even though import prices have dropped and its profits have jumped threefold.

The state-owned oil monopoly raked in more than Rs400 million in profits this month. On Monday, its sole supplier Indian Oil Corporation (IOC) cut the price of petrol by Rs2.10 per litre and that of diesel by Rs2.07 per litre.

Following these reductions, NOC earns a profit of Rs7.66 per litre of petrol and Rs2.46 per litre of diesel. Likewise, the corporation earns a profit of Rs9.08 per litre of aviation fuel sold to Nepali airlines and Rs16.70 per litre sold to foreign carriers. However, NOC incurs a loss of Rs93.62 on every cylinder of cooking gas sold.

“With the jump in earnings, NOC’s estimated monthly profit has now surpassed Rs400 million from Rs140 million,” said NOC Spokesperson Sitaram Pokharel.

According to him, IOC has reduced fuel prices in line with a drop in international market prices. “Global oil prices have fallen due to increased output by the Organisation of Petroleum Exporting Countries and a weaker US dollar,” he said.

According to Indian media reports, authorities on Tuesday cut the price of petrol and diesel by IRs2.16 and IRs2.10 per litre respectively in the Indian market.

NOC said fuel prices in the domestic market would not change despite price cuts by its Indian supplier as cheaper products in Nepal may encourage cross-border smuggling into India.

The corporation also justified its stand by saying that it needed the money to pay for its infrastructural expansion plans. Nagendra Sah, acting deputy managing director of NOC, said they were reluctant to reduce prices due to the price difference in India and Nepal. As per NOC, petrol costs Rs18 per litre more in India.

Sah added they were considering investing in major infrastructure expansion with the profits. “The corporation has planned to build storage plants in the seven provinces to hold 90 days’ supply of fuel,” he said. Towards this end, it has been setting aside Rs5 on every litre of fuel sold.

NOC has adopted the auto pricing system but it has not been implementing it regularly citing one reason or the other. The auto pricing system was applied to petroleum products in September 2014 and to cooking gas three months ago.

Last December, NOC jacked up gasoline prices by Rs4.50 per litre. Cooking gas became dearer by Rs50 per cylinder a few months ago.